Woodside quizzed on business and environmental concerns about WA gas project
Energy giant Woodside has sought to play down concerns about the company’s decision to push ahead on controversial plans to develop the Scarborough gas field in Western Australia.
Woodside chief executive Meg O’Neill faced questions during an investor update on Tuesday about the company’s $16.2b bet to open up the 800 sq km gas field in north-west Western Australia – an area larger than Singapore – and expand its onshore production capacity.
While the company has billed the project as “transformative”, O’Neill was challenged on whether it would live up to its hype. She was also asked about its environmental impact, which has been described as a “disaster”.
But O’Neill rejected defended the company’s commitment to the environment, saying Woodside would cut its carbon emissions by 30% by 2030 through improving the efficiency of its processing plants.
“Designing our emissions is always our first preference, and one of the three key pillars of our carbon strategy,” O’Neill said. “I want to emphasise the point that we can both develop Scarborough and achieve our emissions reductions targets.”
O’Neill also said the gas extracted from Scarborough would serve as a transition for its customers in Asia who are increasingly moving away from coal.
The International Energy Agency said in May that limiting global heating to 1.5C, a goal set out in the Paris agreement, meant exploration and exploitation of new fossil fuel basins had to stop this year.
Woodside has already faced concerns about the cost of cleaning up and dismantling 180 existing gas wells on WA’s north-west shelf – an existing gas field that is now running thin.
Mark Ogge, principal adviser at The Australia Institute, said the company was being selective about how it counted its emissions.
“If you burn fossil fuel, it creates emissions,” Ogge said. “Scarborough gas is not a transition fuel, it is displacing renewables, not coal.”
A report by the Conservation Council of Western Australia and the Australia Institute released in June found the project would release 1.6bn tonnes of greenhouse gases across its lifetime – or the equivalent of 15 coal-fired power plants.
Under the company’s carbon abatement plan, Woodside will be allowed to increase its emissions over the next decade before attempting to reach net zero by 2050.
O’Neill also rejected suggestions the Scarborough gas project was a risky investment.
“We have great confidence in the quality of the project,” she said. “It starts at the resources, so we have great confidence in the quality of the resource. All of the technical work, the execution planning, the detailed design is well underway.
“Now we have [a final investment decision] we have a clear message to the market that this is a de-risked project.”
Woodside is also depending on the price of liquified natural gas remaining high until 2026, when the field is expected to enter production . That will be at a time when competitive projects will have come online as the world shifts away from its reliance on fossil fuels.